Best Ways To Fund a Business
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How do you fund your business? Is it with investors? Loans from the bank? Or something else entirely? Today’s guest will share the various ways you can fund your business and what option is right for you.
Ami Kassar is the founder and CEO of MultiFunding and a bestselling author of The Growth Dilemma. Ami specializes in helping people develop creative cost-effective alternatives to navigate the (very expensive) needs of a business.
Ami shares an example of how entrepreneurs should be thinking about their businesses. If all of your dreams came true, what would your business look like three years from now? And, what’s holding you back? In Ami’s example, what was holding the entrepreneur back from growth was because she was still managing payroll and admin when her talent was really in consulting and leading the consulting teams. In order for her to switch her focus, Ami asked her, “How much would that cost you and how long would that take to start paying for itself?” Her answer was 350K.
So, the question was, could she afford the switch? She couldn’t. She runs her business the way many small business owners do, on a hustled budget, which means they don’t feel like they can spend more than what they can bring in.
Ami opened her eyes to the different loan options she could afford based on her situation. She qualified for a Small Business Loan, which means she could borrow 350k without putting a lien on her house. She would have a monthly payment of $4,300, which was around 12-13% of her cash flow and it would allow her to successfully make the switch in the least painful way.
This is the perfect example of how you can responsibly use leverage to scale up and grow without putting too many financial risks and burdens onto you and your personal household. If everything works according to plan, the entrepreneur would have paid the loan off in 2.2 years and she would triple her bottom line.
Listen in to find out more about all the different ways to fund a business and what’s the best option for you.
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Scaling Up is the best-selling book, by Verne Harnish and the team at Gazelles, on how the fastest growing companies succeed where so many others fail. My name is Bill Gallagher, host of the Scaling Up Business podcast and a leading business coach with a Gazelles. We help leadership teams to get the 4 Decisions around People, Strategy, Execution, and Cash right so that they can Scale Up successfully and beat the odds of business growth success. Our 4 Decisions are all part of the Rockefeller Habits 2.0 (from the original best-selling business book, Mastering the Rockefeller Habits).